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There are many sides to entertain in such a case. My first thoughts of course are probably emotion driven, you know, like sue the buyer who left, and the new contractor , and fire the person in whose job description was the corporate responsibility for make/buy decisions, and for subcontractor award decisions. If you are one of the responsible employees, then there is a lot of additional burden on your shoulders, not just in financial remedy, but in taking the lead in arriving at the correct multipath actions.
Here is what I see as your task, and to even think about delegating it-, well let me suggest you should name a good replacement, all this of course depends on the business structure, and where you sit in the pecking order. Rather than private e-mail I suggest that to put multiple scenarios on the table will get others here, with the applicable backgrounds and experience to come forward.
Realizing that time is of the essence, you first have to move the court to get some time, and determine who is the person, or the lawyer to make sure all the court rules and procedures are followed. But get the court and the other party's lawyer to grant you time to answer and to prepare a case.
Based on available information at this point, one has to make a lot of assumtions in granting quick response. As president, what other corporate offices do you hold. From the screw ups thus far, you'll need to not only get yourlagal issues in order, but at the same time be prepared to let it all hang out as discovery proceeds.
1) define the legal or paralegal assignments and get some time.
2) have the legal assignee determine a strategy for cross suit and- or defense
3) Think about moving the court to throw out the contractor's actions as frivolous or based upon fraud and deciet, and let the court know you intend to work with the contractor to solve the issue in administrative negotiations and that there is going to be a counter suit if this can't be worked out.
In parallel, you have to analyze the situation from the enemy's viewpoint.
This analysis will be ultimatly a demand on you, if you are not going out of business. For instance:
1) what are the companies policys and procedures in Qualifying contractors
2) Who is the authorized buyer who can award a contract?
3) What are your contract compliance and quality assurrance proceedures, and assumming they exist, what went wrong in this instance.
4) Did the contractor have to provide a bid package? were the terms and conditions adequate. What was the provision for final quality inspections, and what were the terms of delivery? Did the contractor have your detailed specifications for the product. How could your company allow delivery to your customer, without all the contractual steps such as final inspection, delivery of title and all the miscellaneous Ts and Cs.
The reasons you need to get into all this fast, is that if your business policys and procedures had that many gapeing holes, the contractor will have plenty of ammunition to attack your positions. Also, and probably as important, you need to take charge of fixing all your problems for future concern and survival. You are a candidate for a thouough ISO 9000 type analysis (so do it!)
The third path:
1) Go to the people who told you about the conflict of interest, and the new contractors lack of manufacturing experience.
2) assemble a dosier on this stuff, as well as your buyer's wife's actions
3)assemble data on the buyer as well, where he works now and any info that may support a conspiracy. While with your co. did he have a conflict of interest, etics or other such document?
4) was the employee an officer of the corporation?
Sui Juris does have private message capability.
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